The Lloyd's Market Association (LMA) has defended its decision to launch a wordings repository in the London market, despite criticism that its system is very similar to one already in place.
The LMA's wordings library will cost managing agents almost the same, on an annual basis, as Xchanging's market wordings library and will offer a similar service of model wordings and clauses that support contract certainty.
A market insider said: "There are two wordings repositories in the market when only one is needed. Xchanging has the bulk of market users, including LMA members. So it all looks a bit unnecessary really and doesn't make the market look particularly smart."
But the LMA insisted that the repository, which was launched on Tuesday, would fulfill different needs to current offerings and is responding to managing agent demands.
It said earlier discussions had suggested adoption of the repository by managing agents representing more than 50% of capacity in the Lloyd's market.
The LMA repository could cost managing agents as much as £27,650 in the first year. The cost is broken down into a one-off charge based on 2006 capacity and an annual licence fee based on the number of individual users within each organisation.
Xchanging, which provides a wordings database for 80% of Lloyd's managing agents, charges a maximum access base licence fee of £6,000 for 15 users. For larger licences the fee is £250 per additional user with a further £100 one-off set up fee for each user.
According to Insurance Times calculations, for a managing agent with 39 users the annual charge for the LMA's repository would be £12,650 compared to £12,000 for Xchanging.